Stumbling onto Kobo, reviewing its threat to Kindle Store

The Kindle and the Kindle Store co-exist only for each other. They are like two childhood friends who shun the company of others. No other eReader, and no other eBook Store, is let in – although a few tablets and phones are allowed to partake of the exquisite joy found in conversing with the Kindle Store.

In the world of eReaders, outside of the little Kindle clique, lie a variety of stores and eReaders that mingle freely. Amongst that milieu one store has begun to attract quite a lot of attention.

Stumbling on to the Kobo Store

Yesterday, the Kobo Store had a one-time use 50% off coupon – a coupon you could use on one out of a few hundred books. Today, it has a 20% off coupon valid on 40 or so books.

On top of these offers is this enticing claim -

Between 13th and 26th December, spend over $35 and get a 45% off coupon. Spend over $25, and you get a 35% off coupon.

Let’s get this straight – First, there’s 50% off, then there’s a coupon for another 35% off?

That does sound very compelling.

There are also a few other things working in Kobo Store’s favor.

Wonder of wonders – The store isn’t restricted to the US. Nor does it make things difficult – In fact, the store is reasonably easy to search through. Plus, unlike the Nook Store, its books work on any eReader. Finally, it uses the mildly awkward Adobe Digital Editions to authenticate books for devices, and not custom-made, super-awkward software like Sony Reader does.

It’s also a civilized store – not asking eReader owners to do anything untoward like enter special passwords.

3 Magic Words

Bought a book. Now reading it on the Nook Color.

There was one magic moment. The book bought from the Kobo Store had this in the ‘Book Info’ section -

Permissions set by the publisher

Allow viewing: on any device.

It’s such a strange contrast. My Kindle books are permanently welded to the Kindle, and to Kindle Reading Apps. My Nook Books are similarly intertwined with B&N’s offerings. Yet, here is a Kobo book that doesn’t discriminate.

3 magical words – on any device.

All it takes is one purchase

After that one purchase everything changes -

  1. Kobo has my credit card information now.
  2. Reading a Kobo Store book makes me a Kobo customer.
  3. The realization hits home – There is an option other than hacking Nook Color to run Kindle for Android. 
  4. The 3 magic words are now stuck in my subconscious.
  5. It becomes apparent that the Kobo Store is pretty decent. Prices for some books are higher than Kindle Store, and the range is less – But it’s decent.

That 50% sale paid off with this eReader owner – Kobo becomes the default store powering my Nook Color.

The Nook Store won’t even let me buy books. My US credit card has a Canadian address, and that’s not good enough for B&N. Understandable – given all the profit they’ve been making recently.

Kindle Store won’t let me read books on Nook. Hacking an eReader just to run Kindle for Android is a bit extreme – especially when Nook Color works really well as is.

Kobo Store is a valid threat to Kindle Store

Kobo eReader lacks punch. It also lacks personality, features, infrastructure, and any hint of excitement. It’s the type of device Steve Jobs has nightmares about. He probably screams – Not a Big Blue Button. For the love of God. Off with his head! – in his sleep.

Yet, Kobo eReader has the support of a Kobo Store that is quite impressive.

Here are a few of the Kobo Store’s advantages -

  1. The books work on any eReader that supports ePub.
  2. You can take your library with you if you switch devices.
  3. It works internationally. Not sure which countries other than US and Canada.
  4. It’s very aggressive with discounts and coupons.
  5. It’s managed to incorporate a lot of free books from Smashwords.
  6. It’s a decent store – easy to navigate, clear and clean-cut, beginning to get user reviews.
  7. There are good Kobo reading apps for other platforms.

Perhaps most importantly, it doesn’t make any big, huge mistakes. There are some horrendously priced books – However, that has more to do with the kind and benevolent Agency Model.

Amazon has no option but to sell ePub editions to eReader owners whose eReaders support ePub

Here’s a suggestion from K H Acton -

What if Amazon SOLD ePub books along with its proprietary format, but limited the Kindle to the proprietary format. Then it could keep Kindle customers using the best ebook store around AND open the best bookstore to the ePub readers.

It’s an absolutely brilliant suggestion.

Look at the threat Kobo Store poses, and the suggestion is not only brilliant, but also timely. It would be a proactive move that would prevent Kobo Store from eating up the entire non-Kindle market.

  1. With Sony’s terrible Reader Store, and B&N’s ‘ePub that works only on Nook’ fiasco, the Kobo is the clear #1 choice.
  2. If Amazon lets that status quo remain, soon Kobo will be making a ton of money from eBook sales.
  3. That would put Kobo in position to mount an all-out attack on Kindle’s lead – in both eReaders and eBooks.
  4. If Amazon sells books in ePub format, to eReader owners whose eReaders support ePub, it becomes the best eBook Store for them instantly. That prevents Kobo from being their #1 option.
  5. It would curtail the Kobo threat – Before it became a huge one.

Amazon can ill-afford to let a single rival store become the eBook source for all non-Kindle devices. Kobo is threatening to do that with its excellent, ‘works on any device’, ebook store.

Will Amazon make a proactive move to fend off Kobo?

Kobo Store is likely to grow into a big and dangerous threat to the Kindle Store. You could argue that Kobo isn’t yet a real threat – that Amazon should wait 2 years to see if Kobo or another ePub store manages to unite the ePub hordes.

However, there’s no point in launching ePub support for non-Kindle eReader owners after another store has established itself. The real value would be in making the move now.

Amazon has shown a tendency to let its rival eReaders and rival stores make moves first – PDF support, books in the browser, touch. It waits for the move, measures/estimates the impact, and then counters. With Kobo, it’s a different situation – Kobo is wrapping up customers and becoming stronger. Amazon needs to be proactive – It needs to stop the rise of Kobo before Kobo gets to the stage where it turns into a monster.

What might Kobo do to become a bigger threat to Amazon?

Kobo can actually do a lot -

  1. Match Kindle Store on ebook prices across the board.
  2. Release an eReader that looks like it’s at least trying.
  3. Target Nook and Sony Reader owners more aggressively.
  4. Keep expanding its international reach.
  5. Find a way to sell to Kindle owners.
  6. Release a Kobo Tablet.
  7. Target Nook Color owners very aggressively.

Perhaps the biggest opportunity for Kobo is in targeting all the new Nook, Nook Color, and Sony Reader owners. Kobo’s already good enough to become the eBook store of choice for non-Kindle eReaders – It just has to get the word out.

The threats to Kindle and Kindle Store keep multiplying

Kobo is the latest addition to a long list of significant threats to the Kindle.

Nook Color is currently the single biggest threat to the Kindle – ever. Nothing else is even close – Nook Color makes the iPad seem like an overweight sumo wrestler trying kickboxing.

Kobo Store seems a distant threat – However, it’s almost as dangerous as Nook Color. Kobo Store can sell books to every single non-Kindle eReader. It might end up being the one eBook store that rules the entire ePub world.

The other threats we keep hearing about. Yet, they aren’t the ones Amazon should worry about first. Nook Color and Kobo eBook Store will end up being the biggest challenges for the Kindle.

3 free kindle books, Kobo WiFi eReader announced

First, the three free kindle books (two of which were free in August 2009, thanks to Happy Reader Joyce for the update) -

  1. Elvis and the Dearly Departed by Peggy Webb. Rated 4 stars on 9 reviews.

    They say you can’t get to Heaven without passing through the Eternal Rest Funeral Home.

    And no one gets into Eternal Rest without passing muster with Elvis-the basset hound who’s convinced he’s the reincarnation of the King of Rock ‘n’ Roll. Brewing up a big ol’ pitcher of Mississippi mystery, Peggy Webb’s delightful new series is as intoxicating as the Delta breeze.

  2. According to Jane by Marilyn Brant. 4 stars on 60 reviews. 

    In Marilyn Brant’s smart, wildly inventive debut, one woman in search of herself receives advice from the ultimate expert in matters of the heart. . .

    It begins one day in sophomore English class, just as Ellie Barnett’s teacher is assigning Jane Austen’s Pride and Prejudice. From nowhere comes a quiet “tsk” of displeasure. The target: Sam Blaine, the cute bad boy who’s teasing Ellie mercilessly, just as he has since kindergarten. Entirely unbidden, as Jane might say, the author’s ghost has taken up residence in Ellie’s mind, and seems determined to stay there.

  3. Raising Jake by Charlie Carillo. 4.5 stars on 80 reviews.

    Sammy Sullivan, a crusty old rewrite man at a New York City tabloid, and his teenage son embark on a weekend of male bonding in Carillo’s witty, insightful second novel. After rough-edged Sammy is fired and his son, Jake, gets expelled from his elite private school, father and son, who’ve grown apart, decide to spend the weekend revisiting places that hold the key to Sammy’s past and may shed light on Jake’s future.

    Along the way, Sammy confronts painful memories of his religiously obsessive mother and introduces Jake to the boy’s long-estranged grandfather while both try to figure out what’s next.

All 3 of these are very highly rated books with some solid reviews.

Let’s turn to the news of a new Kobo Reader.

Kobo WiFi attempts to take on Kindle WiFi

The arrival of Kindle 3 and Kindle WiFi completely destroyed Kobo’s chances in the eReader market. Thankfully, it’s countered with the Kobo 2. Will leave the Kindle WiFi vs Kobo 2 comparison for a later post. The following is just a general discussion of the Kobo’s strengths and weaknesses.

The strengths of the Kobo 2 -

  1. It has WiFi now.  
  2. A choice of 3 colors – black, porcelain with a silver back, porcelain with a lavender back. 
  3. The firmware supposedly works well now. Engadget thinks so and mentions that Kobo 2 has a faster processor. Engadget also includes some photos and the Press Release. 
  4. It’s just 0.4″ thick and weighs just 7.8 grams. That might be a mistake because 7.8 grams is 0.275 ounces. So it’s probably 7.8 ounces.
  5. Priced at $139.
  6. ePub support and hence support for Library books.
  7. SD Card slot.
  8. If you’re a Borders Rewards member you get bonus points or something.
  9. Kobo is making an effort and has an eReader Bill of Rights. Here are a few snippets -

    If the company you’re buying ebooks from got hit by a meteorite tomorrow, what would happen to your library?

    If the device you read on was eaten, burned or broken, can you get your purchased books back?

If either Amazon or B&N gets hit by a meteorite our ebooks would be the least of our concerns.

The drawbacks of the Kobo 2 -

  1. Doesn’t arrive until November 1st.
  2. Kobo Store isn’t as good as Kindle Store.
  3. No physical keyboard. 
  4. The porcelain versions still look awkward with that big blue button.  The black version looks pretty good.
  5. It might not have eInk Pearl. Not sure why Borders hasn’t mentioned eInk Pearl if it’s present – If it isn’t present why release a model without the latest screen technology. 

At this stage a lot of information is missing – What exactly is the extent of PDF support? Is there text to speech? What other features do we have? Will there be a browser?

Overall, it’s a nice attempt by Borders and Kobo to claw their way back into the eReader race but announcing a month early and without revealing details seems a bit weak. It suggests they were doing really badly and were forced to prepone the announcement of the Kobo 2. Also, it gives Amazon and B&N a month to add-on more features and increase the gap between Kindle/Nook and Kobo 2.

Guess what the new $150 Kobo eReader is being called

A Kindle Killer. An eReader that knows its place.

Since it’s a ‘skimps on features, bottom of the barrel priced’ device it fits in perfectly with the Press’ preconceived notions of what an eReader should be. It’s quite amusing to see the Press talk about how the $150 price and the addition of Borders (yup, they aren’t yet bankrupt) makes the Kobo the future of the eReader.

The Press’ take on Kobo the Magnificent

Business Week focuses on the lower price and goes so far as to suggest that Kindle and Nook prices will be cut -

… an e-reader more than 40 percent less expensive than devices from Amazon.com Inc. and Barnes & Noble Inc.

The less-expensive e-reader may force Amazon.com and Barnes & Noble to cut prices, narrowing already small margins on their devices, Souers said.

“It’s a necessary move by Borders, but it could also end up backfiring for the whole industry,” …

San Francisco Chronicle brings up the whole ‘eReaders must be cheap to survive’ theme -

A newspaper that suffered a 22.7 percent decline in its weekday sales (in the last 6 months of 2009) shouldn’t really be professing business advice.

The Street lets us know that Kobo preorders will arrive on June 17th and Borders will begin selling the device in stores in August. Also, that shares of Borders went up 7.3% to $2.22 ($2.22 is the stock price, not the gain).

You also get the usual posts claiming eReaders are tablet computers and other strange miscategorizations.

Kobo Features the Press can’t get over

It begins and ends with price. The $150 price meets the Press’ expectations of what reading is worth so they’re happy to talk about the Kobo.

The second most often mentioned Kobo advantage – 100 classic books. How is that an advantage? The Internet Archive and Google are each giving away a million of these for free.

To be fair to Kobo the Press are missing out on a few good Kobo features -

  1. It’s a platform and it works on a lot of devices – Blackberry, iPad, iPhone, Palm Pre, PC, and Mac.
  2. It supports ePub. 
  3. Up to 6 devices can share the same ebook.

Also, while we are on the subject of being fair to Kobo, there are quite a few comments from people who think the $149 price is right – with the occasional ‘it should be $99′ interlude.

My Take on the $150 Plain Jane of eReaders

It’s all relative.

If instead of fixating on the dollar amount we look at value for money there’s no comparison – the Kobo offers much less value for money than Kindle or Nook.

Kindle tears apart Kobo on value for money

Here are some of the features you get for just $110 more if you pick the Kindle -

  1. Free wireless store browsing and 60 second ebook downloads.
  2. Cheaper eBook prices (except for Agency Model Publishers).
  3. Free Internet. Note that the free Internet and wireless browsing are across 100+ countries (Internet is free only if your home country is USA).  
  4. WhisperSync – synchronized reading across all devices. A feature Kobo can never deliver because the Kobo doesn’t have wireless.
  5. Text to Speech – for books where it hasn’t been disabled (your mileage may vary).  
  6. Folders. So far it seems Kobo doesn’t have Folders.
  7. Screen rotation and lots of fonts and line spacing options.
  8. Sometime this year (or perhaps next) a Kindle App Store. 

There are lots more advantages. For example, Kindle gets 20 or so free book offers on new books each month – other stores don’t get as many (let’s leave out self-published books).

Nook does too

Here’s some of what you get for $110 more if you pick the Nook -

  1. Free store browsing and 60 second downloads over 3G or WiFi.
  2. WiFi connectivity and a good, solid browser.
  3. The little color touch screen for navigation.
  4. Free Chess and Sudoku.
  5. A choice of three fonts.
  6. Usually better prices on eBooks (except on Agency Model Publishers).
  7. The LendMe feature – when enabled by Publishers. 
  8. Great screen contrast.

Fundamentally, you get a good eInk reader with 3G, WiFi and a color touchscreen and some good features on top – with a Kobo you get an untested eInk reader with a big, blue button.

You have to factor in Total Cost of Ownership

Nook and Kindle have gone through a lot of testing and improvements (well, a little for the Nook and a lot for the Kindle). You won’t be the unofficial beta testers and you will get devices that work pretty well. Kobo is Version 1 – a complete unknown.

Then there’s ebook prices. eBook prices alone might eat up that $110 you saved over the course of a year or two (depending on how much you read).

My grandfather used to say -

When you choose the higher priced, high quality option you cry once.

Pick the cheap, low quality option and you cry again and again.

Often when you buy a non-Agency Model Kobo ebook you’ll have to fork out $2 extra (perhaps just $1 extra, perhaps $3 extra) and you’ll wish you’d thought about it more. It won’t be all the time – just often enough to eat up that $110 savings and make the total cost of ownership the same as the Kindle and Nook. All without getting the bonuses that come with those two eReaders.

Years of rationalizing that wireless doesn’t make a difference were wiped out for me in a few short hours when my international Kindle DX arrived. It does make a difference and it’s just one of many advantages the $259 eReaders have over the Kobo.

Recommendation – Only buy Kobo if you must

That $110 you’re saving now isn’t worth what you’re losing out on. You’re going to end up spending most/all of it on higher priced ebooks anyways.

With the Kindle and the Nook you get a much better overall reading experience and they’re well worth the price. Don’t let the Press fool you into buying a device that isn’t going to make a huge positive impact on your reading experience (like the Kindle and the Nook will).

Kindle vs Kobo – Kobo Reader being built by RIMM?

It seems that the Kobo CEO showed off a slide that had a Kobo eReader prototype with a RIMM logo. That would certainly make Kindle vs Kobo much more interesting.

Not sure how this prime piece of information isn’t getting more coverage.

Kobo getting a RIMM BlackBerry eReader?

Quill and Quire report on additional details on the Kobo Reader disclosed at a recent conference -

[Via Sources] Serbinis confirmed that Indigo Books & Music will carry the device in Canada on a non-exclusive basis.

Additionally, he may have let slip the device’s manufacturer when he showed a slide of an e-reader prototype bearing the logo of Research In Motion, the Ontario-based creator and manufacturer of the BlackBerry smartphone.

It wouldn’t be a very big surprise if a company started by Canada’s biggest book store chain tied up with one of Canada’s biggest technology companies.

What do we know about the Kobo Reader?

The things we definitely know are -

  1. Kobo Reader will be out in 2010.  
  2. There’ll be retail presence in US, Canada, UK, Europe, China, Australia, and more. 
  3. Kobo Reader will support stores selling ePub books – provided they use Adobe DRM and not custom DRM. 
  4. Kobo eBook Store will support eReaders that support ePub and Adobe DRM. In fact it already does.

For further details check my post comparing Kindle Vs Kobo on strategies and more

The rumors -

  1. Kobo Reader will be out in Q2, 2010.
  2. It’ll be sub $200.  
  3. It’s made by RIMM.  

It’s worth noting that Kobo’s CEO, RIMM, and the conference organizers have refused to confirm or deny claims.

Kindle vs Kobo – Is a RIMM powered Kobo Reader a big threat?

In our previous Kindle vs Kobo comparison we’d found -

  • Kindle has sizeable advantages including a lead, large customer base, wider range of books, better prices, better cloud and web infrastructure, and more trust. 
  • Kobo is fighting back by having international retail presence, going with ePub, and selling to other eReaders including Nook and Sony.

The Kindle had the clear lead and Kobo was more of a borderline threat.  

RIMM backing Kobo makes it a real threat.

A RIMM Blackberry branded eReader would improve Kobo’s chances a lot

There are some things RIMM brings to the table that are invaluable -

  1. Its brand and the trust customers have in it.  
  2. Expertise in building mobile devices. 
  3. Expertise in running services for mobile devices.
  4. All the years and iterations of improving mobile software and hardware.

If RIMM really is building the Kobo Reader it will be a very, very dangerous device.

Closing Thought – Kindle vs Apple vs RIMM

This previous Christmas Amazon was competing with Sony and B&N and neither could get the supply chain figured out. B&N couldn’t even get their software tested in time.

Next month Apple will target the eReader market, albeit with a non-dedicated eReader. A month or two after that we might see a Kobo eReader created by RIMM enter the market – Kindle vs Kobo would morph into Kindle vs RIMM.

Amazon are suddenly playing with the very best in the business.

Kindle vs Kobo

While there are no Kobo Reader details out, and we can’t do a Kindle Vs Kobo Review yet, we can certainly compare the ebook stores and the strategies.

Kindle Vs Kobo – Reader to Compare by Q2, 2010

Kobo have confirmed that they will have a Kobo Reader out in the second quarter. No details beyond that are known at the moment.

The Kobo will almost certainly be sold at Borders, Indigo, Borders Australia, and 3 Mobile Stores. The Kobo CEO seems to say in an interview that Kobo just decided this month to do an eReader.

How are they going to create a good eReader in 6 months?

Kindle Vs Kobo – Comparing Strategic Advantages

Kindle Vs Kobo – At first, Kindle seems far ahead

The Kindle really does have a huge lead and some significant advantages -

  1. A 2.5 year lead by the time the Kobo Reader comes out. 
  2. A laser focus on reading that other companies seem to be missing. For example, the Kobo CEO thinks the future is multi-purpose devices.
  3. Wider range of books than anyone else. Kobo say they have 2 million books – However, 1.8 million of those are from the Internet Archive. 
  4. Better web infrastructure and web expertise than any other book seller or eReader company.
  5. Kindle 3 and Kindle DX 2 ought to be much more polished than a first generation Kobo eReader.
  6. A large installed base of customers.
  7. A strong revenue stream from eReader sales and eBook sales.
  8. Loads of brand recognition.
  9. Kindle for iPhone.
  10. Kindle for PC.

We could write down quite a few more. Kindle has a sizeable advantage in the Kindle Vs Kobo Wars.

Kindle vs Kobo – Kobo springs a few, big surprises

Kobo has a pretty dangerous partnership behind it and some advantages of its own -

  1. Retail presence in the US via Borders Stores.
  2. Retail presence in Canada via Indigo Stores.
  3. Retail presence in Singapore, Australia and New Zealand via REDgroup.
  4. Retail presence in UK and Europe via 3 mobile stores and other retail stores.
  5. Brand recognition amongst readers in at least 6 markets i.e. US, UK, Canada, New Zealand and Singapore.
  6. A Li Ka-Shing company is investing in Kobo and that means access to retail and telecom across Europe and Asia.
  7. Shortcovers iPhone App and 9 months experience with the iPhone.
  8. They’re very clear about their global vision and intend to add a ton of content from all over the world.
  9. They aim to have Kobo-powered services on 4 continents by end of 2010. 
  10. Their vision of any book on any device gives them more channels than Amazon.
  11. ePub and the usual openness and choice.
  12. Kobo Reader will support any store that sells in ePub.

Reading up more on the partners certainly makes Kindle Vs Kobo seem like it might eclipse Kindle’s rivalries with Sony and B&N. The partners, each with their regional expertise and retail locations, will be a dangerous enemy if they can coordinate well.

Li Ka-Shing, with his $16.2 billion fortune and the largest health and beauty retailing business in the world, is perhaps the most dangerous.  

Do check out the interview with Kobo CEO Michael Serbinis.

Kindle Vs Kobo – Comparing the eBook Stores

Kindle Vs Kobo – Kobo really is device agnostic

Since Kobo is just a rebranding of ShortCovers they already support -

  1. Adobe Digital Editions which works on PC and Mac.
  2. Any eReader that works with ADE which means Sony Reader and Nook and a lot more.
  3. Smartphones – including iPhone, Blackberry, Palm Pre, and Android.

That is an advantage over the Kindle. If interoperability is your cup of tea you’ll feel at home at Kobo Books.

Here’s a list of devices Kobo Books work with (via Consumerist) -

  • Asktak (EZ Reader, EZ Reader Pocket Pro, Mentor)
  • Barnes & Noble Nook
  • BeBook (One, Mini)
  • Bookeen (Cybook Opus, Gen 3)
  • COOL-ER Classic
  • Elonex eBook 600
  • HanLin eBook (V3, V5)
  • IREX Digital Reader 1000S
  • Neolux NUUT2
  • PRS-300 Reader Pocket Edition
  • PRS-505 Reader Digital Book
  • PRS-600 Reader Touch Edition
  • PRS-700BC Reader Digital Book
  • The Kindle Store has better range and lower prices

    The Kindle Store beats Kobo Books in a few crucial areas -

    1. Wider Selection i.e. 360K books compared to the 200K Kobo has.
    2. Note that I’m leaving out the 1.8 million Internet Archive titles that both have access to.
    3. Kobo has fewer new free book offers.
    4. The Kobo books website is rather plain and doesn’t have much searchability.

    At the moment the Kindle Store has the clear advantage.

    Kobo has the international advantage

    One area where Kobo shines is in international -

    1. We’ve already discussed the retail locations.
    2. Through Li Ka-Shing they also get access to retail stores in China.
    3. They claim to offer books in 180 languages.
    4. They say they have had a million downloads across 200 countries.

    The partners do bring a lot of regional expertise and physical stores and that will be crucial when the Kobo Reader launches.

    The Kindle Store has the Kindle

    The Kindle is a direct link connecting some of the most lucrative book buying customers with the Kindle Store.

    That’s an advantage that’s hard to beat.

    Kindle Vs Kobo has to factor in that the Amazon Kindle has already captured a lot of the best customers.

    Kindle vs Kobo – Will the Kobo Alliance remain stable?

    Indigo have invested $5 million out of the $16 million initial investment and they had started and built up ShortCovers so they get the lion’s share.

    Kobo currently has this break-up (via Canadian Press) -

    1. 58% is owned by Indigo. 
    2. 20% is owned by Borders UK. 
    3. The Rest is presumably split between REDgroup and Li Ka-Shing.

    What happens if Kobo takes off?

    The eBook Store and the eReader might become hugely important and there’s little chance that Indigo’s partners will be happy with the current 42% they have.

    The biggest weakness of Kobo in the Kindle Vs Kobo Wars is that the partners might end up fighting each other.

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